After a shaky beginning the FTSE, with some help from the US, has managed to turn things around. In today’s Q&A session for Mark Carney, we have seen the first chinks in his armour as MPs grilled him over how aware the Bank of England was that LIBOR might be rigged. Regardless of whose watch this occurred on, Mark Carney is the one facing the music now. The calm trading environment that the FTSE has enjoyed today has appeared as quickly as yesterday’s flurry of panicked trading materialised, but one suspects that the panic is just around the corner waiting for further military incidents in Ukraine.
Traders await retailer IPO's
Tomorrow will see the beginning of conditional trading in both Pets at Home and Poundland. IG’s grey market has both companies trading at a premium to their IPO listings, which might seem overly optimistic. However, last year IG clients predicted that Royal Mail would start trading at over £4, versus its listing price of £3.30. Given that they also came within a few cents of Twitter's valuation on its first day of trading, we could see a similar strong start for tomorrow’s stock market debutantes.
Ex-prime minister Gordon Brown has added his opinion to the devolution debate over Scotland. All of this has once again muddied the waters for those companies based north of the border, but business south of the border has ensured the likes of Royal Bank of Scotland head the list of today’s FTSE fallers.
Yellen's comments soothe US markets
Monthly US wholesale inventories have crept higher as business spending has eased. However, that has not stopped the markets from heading higher. Words of comfort from Federal Reserve chair Janet Yellen over the US markets' ability to withstand further reductions to the US debt-purchasing scheme have been taken well by all the major US equity markets. Most of the current uncertainties are happening over in Europe and, as such, it has given US traders the ability to focus on stock specifics rather than the macro issues. In an aggressive reversal of sentiment from yesterday’s disappointing figures, McDonald's has seen its shares trade 3.5% higher in early trading.
Gold lacking conviction
Brazilian coffee growers will be hoping that the chances of El Nino conditions increase, as the current lack of rainfall continues to squeeze the arabica coffee price ever higher; the spot price is now up 83% in 2014 alone. Indecision is rife with the Brent crude price, as the last five trading days have seen the commodity break and retake its 50-,100- and 200-day moving averages. Gold's dalliance with $1350 continues, as it keeps showing the desire to break above this level yet lacks the commitment needed to carry out this move.
EUR/USD fails to break through highs
With comments flying from both the European Central Bank president Mario Draghi and the latest EU finance ministers' meeting in Brussels, EUR/USD has failed to break through its highs from earlier in the week and now appears to be suffering from a touch of vertigo. That being said, it does look like the $1.40 level will be reached sooner or later, as the 50-day moving average has worked as a solid support for the last six weeks.